Quilter Compensation Claims

In recent developments, Quilter International, known as Old Mutual International, has found itself at the center of a growing concern over investment advice. With a substantial £24 million set aside for client complaints and potential compensation, the spotlight is on the financial services provider’s responsibility towards its clients’ investment choices. This move comes amid increasing scrutiny over the advice given to investors, those involved with portfolio or insurance bonds issued by Quilter and Friends Provident.

For clients of Quilter, the emerging scenario might present an opportunity to seek redress. Whether it’s the mismanagement of funds or the mis-selling of products, the implications are significant, raising questions about the accountability of investment advisors.

Important points

Quilter International, previously known as Old Mutual International, has allocated £24 million for client complaints and potential compensation because of concerns over investment advice.
This compensation pool is a response to increasing scrutiny over the financial advice provided to investors, especially those invested in portfolio or insurance bonds issued by Quilter and Friends Provident.
The Financial Conduct Authority (FCA) has started a skilled person review of Quilter plc’s ongoing advice services, focusing on the adequacy and compliance with Consumer Duty standards.
The review aims to evaluate the alignment of Quilter’s advice services with regulatory expectations and client interests, including an investigation into fee structures and service delivery mechanisms.
Depending on the outcomes of the skilled person review, Quilter may face significant remedial actions, including compensating clients who did not receive the promised service levels, potentially affecting the firm’s financial standing and client trust.
Quilter plc, with its heritage in wealth management, continues to affirm its commitment to high service quality and regulatory compliance amidst these challenges.

The FCA’s Scrutiny of Quilter plc’s Ongoing Advice Services

Background on Quilter plc

Quilter plc, a well-known company specializing in wealth management in the UK, provides tailored investment solutions and services for its clients. Originally operating under the name Old Mutual Wealth Management Limited, the company transitioned to Quilter plc as part of the managed separation strategy from Old Mutual plc. It boasts a listing on the prestigious London Stock Exchange and upholds a secondary listing on the Johannesburg Stock Exchange. This rebranding marked a significant milestone in the firm’s strategic evolution, underlining its commitment to providing exceptional wealth management services.

Company Overview

Operating through two distinct segments, Affluent and High Net Worth, Quilter plc extends a comprehensive suite of services. These include discretionary investment management, intricate financial advice, and advanced investment platform services. With a solid heritage of steering customers through fluctuating market conditions, Quilter plc dedicates itself to aiding clients in navigating their financial landscapes effectively. This dedication underscores the company’s mission to empower clients to achieve their financial aspirations with confidence.

Financial Information

For the fiscal year concluding on December 31, 2023, Quilter plc disclosed a revenue of £4,626 million alongside an operating income of £88 million. Demonstrating its financial robustness, the company reported a net income of £42 million. Notably, Quilter plc managed assets under management and administration (AuMA) amounting to £106.7 billion, showcasing its significant footprint in the wealth management sector. With a total equity of £1.519 billion and a committed workforce of about 3,000 employees, Quilter plc continues to solidify its position in the global financial landscape.

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The Skilled Person Review

Context and Trigger

A skilled person review at Quilter was started following productive discussions with the Financial Conduct Authority (FCA). This move comes as a direct response to the FCA’s concerns about the adequacy and compliance of Quilter’s ongoing advice services. The review is crucial in assessing whether the ongoing advice provided to clients meets the standards set by the Consumer Duty. It’s aimed at ensuring that Quilter’s services remain in line with regulatory expectations and client interests. Set to begin shortly, this review underscores Quilter’s commitment to maintaining high levels of compliance and client service quality.

Scope of the Review

The review encompasses a comprehensive evaluation of Quilter’s advice services, specifically targeting the ongoing charges levied on clients. Given the company’s various performance-based incentives, which are tied to both individual and company performance metrics, the review will scrutinize the alignment of these incentives with the quality of advice and service provided to clients. This aspect is crucial for ensuring that the advice given genuinely serves clients’ best interests, reflecting on the firm’s integrity and adherence to regulatory standards. The scope implies a thorough investigation into the fee-structure and service delivery mechanisms at Quilter.

Potential Outcomes and Impact

Should the skilled person review reveal discrepancies or shortcomings in the service provided to Quilter’s clients, it could lead to significant remedial actions. One potential outcome includes compensating clients who were charged for service levels they did not receive. While Quilter acknowledges the prospect of incurring remedial costs, the exact amount remains undetermined. The outcomes of this review have far-reaching implications, not only for the firm’s financial standing but also for its reputation and client trust. Quilter’s proactive approach to the review shows its commitment to transparency and rectifying any identified issues, ensuring adherence to regulatory expectations and the continuous delivery of high-quality client service.

Quilter plc’s Response to the Review

Quilter plc’s engagement with the skilled person review highlights its dedication to upholding the highest standards of client service and regulatory compliance. By addressing the Financial Conduct Authority’s concerns head-on, Quilter demonstrates a clear commitment to transparency and accountability. The potential for compensating clients who have experienced service discrepancies not only reinforces this commitment, but also sets a precedent for the financial services industry. As Quilter navigates the outcomes of the review, its proactive approach may well strengthen its financial standing and bolster its reputation among investors. This dedication to excellence and client satisfaction ensures Quilter remains a trusted name in financial services.

Timeline of FCA Actions Involving Quilter plc

October 18, 2019: The FCA issues a warning about a clone firm impersonating Quilter Cheviot Investment Management / Quilter plc / Quilter Private Client Advisers. This clone firm was not authorized by the FCA and was using details similar to the authorized firm to scam people[2].
June 1, 2023: The FCA praises Quilter Financial Planning for its handling of Lighthouse’s involvement in the British Steel Pension Scheme scandal. Quilter had acquired Lighthouse in June 2019 and took responsibility for the unsuitable advice provided before its purchase, proactively carrying out a redress exercise[15].
May 15, 2023: The FCA censures Lighthouse Advisory Services Limited for serious failings in relation to advice given to members of the British Steel Pension Scheme. Quilter, which had acquired Lighthouse, took responsibility for the unsuitable advice and paid approximately £23.17 million in redress to affected customers[4].
March 11, 2024: Quilter hires Alexander Kirby, a former FCA Consumer Duty expert, as reporting and governance manager, indicating the firm’s ongoing engagement with regulatory compliance and governance[3].
April 23, 2024: Quilter announces that it will conduct a review of its network’s ongoing advice service, which will be carried out by a skilled person following further dialogue with the FCA. This review is expected to commence shortly, and Quilter commits to updating the market on the outcome in due course[6].

This timeline reflects the interactions between Quilter plc and the FCA, including regulatory warnings, censures, and proactive measures taken by Quilter in response to past failings. The skilled person review is the latest step in ensuring that Quilter’s ongoing advice services meet regulatory standards and that clients are receiving the services for which they are being charged.

Mis-Selling Claims Against Quilter plc